With increased awareness about environmental issues, the trend of automobile industry is to use ‘Recycled’ or ‘Biodegradable’ or ‘Energy Recoverable’ material. As a part of this programme, to make the vehicle ‘Green’ in nature, many automobile OEMs have taken the initiative to make use of natural fibre composite in their vehicles. Natural fibre based composite has been successfully proven for less critical as well as for semi-structural applications in an automobile. These typical applications are insulations, headlining, carpets, door pad etc.There is a demanding task for automotive OEMs to meet 85% Recyclability and 95% Recoverability targets by year 2015. To meet the RRR (Reuse, Recycle & Recover) and the ELV (End of Life) regulatory requirements, increased use of natural fibre based composite/ biopolymers is unavoidable. Natural fibre can offer potential advantages such as weight saving and improve overall green rating of the vehicle. Use of renewable resources can also encourage thermal recycling.This paper describes the application of jute based composite for ‘Headlining’, where the properties of jute based composites are compared with those of conventional polyurethane foam + glass fibres based headlining.To address the limitation of lower strength of jute fibre, the basic substrate design of jute composite was optimized so that it offers properties equivalent / comparable to those of conventional polyurethane foam + glass fibre based material. In the proposed jute based composite, jute fibres are mixed with Polypropylene fibres to get stiffness for the substrate. The GSM (Grams per Square Meter) of jute based composite was selected in such a way that it addresses all the end product requirements such as flexural strength, adhesion, flammability, environmental resistance, thermal conductivity etc.